Friday, May 25, 2012

Government, private payers bank on primary care

One of the tired refrains from some physician critics of the health reform law is that it did “nothing” to help primary care—when in fact, the law spends tens of billions of dollars to increase payments and improve the lot of primary care doctors.

Writing in the current issue of the New England Journal of Medicine, respected health journalist John Iglehart writes:

“Primary care physicians, long in the doldrums over their incomes and challenging work–life balance, may be heartened by recent steps taken by policymakers and payers signaling the increased recognition of the foundational role they could play in a restructured health care delivery system. Hopeful signs include increased Medicare and Medicaid payments for several years under the Affordable Care Act (ACA), plans by major private insurers to increase primary care fees, and initiatives that medical groups are taking on their own . . . although the ACA’s fate rests with the Supreme Court . . . [its] enactment and the preceding debate built momentum for strengthening primary care. Thus, whatever the Court decides, many of these efforts may well survive, thanks to heightened interest in primary care from policymakers and the private sector. The initiatives include “fee increases of 10% over 5 years (2011–2016) for [designated services by] primary care providers” . . [and] “equalization of Medicaid and Medicare fees for primary care services in 2013 and 2014.” [Emphasis added in italics.]

CMS, in announcing a proposed rule to implement the Medicaid pay equalization provision, reports that the government will provide states with $11 billion to bring Medicaid fees for primary care up to the Medicare rates. CMS also reported that “in 2011, over 150,000 primary care providers nationwide received almost $560 million in higher Medicare payments” because of the 10% primary care bonus program.

Because of the Medicaid pay equalization rule, many physicians will get a huge Medicaid raise next year. The California Medical Association says that the rule will result in a “50 to 60 percent increase in Medi-Cal rates for primary care physicians, including family medicine, pediatrics and internists, plus related subspecialties.” The Kaiser Family Foundation has a nice chart comparing Medicaid fees as a percentage of Medicare in every state, and although it is several years out-of-date (2008), it shows how physicians stand to gain. In eleven states, Medicaid payments for primary care were less than 60% of the Medicare rates (NY, RI, NJ, CA, DC, ME, FL, IL MN, MI; in two states (NY, RI), Medicaid paid less than 40% of the Medicare fee.

Mr. Iglehart points out that there are other initiatives in the work to help primary care:

“The Comprehensive Primary Care Initiative aims to foster collaboration between public and private payers to strengthen primary care. It creates a new value proposition for primary care, offering additional payments for currently unreimbursed services considered essential to a higher-performing delivery system: proactive care management for high-risk patients, improved access to after-hours care, communication with patients between office visits, and shared decision making. The Centers for Medicare and Medicaid Services committed, on behalf of Medicare beneficiaries, to pay a $20 monthly care management fee and offer shared savings to 75 high-performing primary care practices in seven markets—the states of Arkansas, Colorado, New Jersey, and Oregon, plus New York's capital district (Albany and the Hudson Valley), Cincinnati–Dayton (Ohio), and Greater Tulsa (Oklahoma)—where multiple insurers have committed to a similar payment model. The CMMI hosted a recent gathering of 41 payers in these markets to discuss their participation.”

He also notes that several large insurers, covering millions of lives and involving hundreds of thousands of physicians, have announced plans to increase primary care fees.

It may be too early to whistle “Happy Days are Here Again” when it comes to primary care. But for the first time in many years, public and private payers are putting their money into primary care, due in large part to “enactment [of the ACA] and the preceding debate” on the “foundational role [primary care] could play in a restructured health care delivery system.”

Today’s question: What do you think of Mr. Iglehart’s premise that primary care may be seeing a light at the end of the tunnel, due in large part to the ACA?

15 comments
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Having killed off primary care. The purpetrators are giving a homeopathic dose of epinephrine to a dead patient in an attempt of revive them. Small problem, missing in action are a generation worth of primary care physician graduates, who are somewhere (basically anywhere) other than primary care. So utterly disgusted by the events of the past 20yrs that they have reinvented themselves into other roles. When I see hospitalists leaving to become general internists as they are first and foremost trained to be, I will start to believe this. People have a way of voting with their actions. Until then all this is nothing but propoganda.

The "10%" primary care bonus is a positive step. A bit early to declare a victory for primary care however. Not to be too ungrateful, but...-- Of course the bonus is not actually 10%, since payments that are patient responsibility (like the annual deductible) are not counted toward the bonus. -- No bonus is safe from the SGR nightmare which was not even addressed by the ACA.-- Where will the states get enough money to cover increased provider fees? Physician payments in my state are almost $2 billion, so how is $11 billion to all 50 states going to cover a 40-60% increase in physician fees? As in the past, a deficit created by Medicaid fee equalization will merely be funded on the state level by reducing patient eligibility, drug and non-physician services for this vulnerable group. Lack of these services makes it impossible to give good basic care.-- Wow, a $20 a month Medicare management fee! That should just cover the additional staff time to do the associated paperwork.-- Primary care docs need a reduction in onerous paperwork (preauthorizations, inane Medi-care/aid forms), as long ago promised by "Double-talk Don" Berwick before he stepped down. In my office, the avalanche continues to spew from my fax daily.-- Nothing is being done to address inequities of primary care payments caused by the RBRVS, which is determined by physicians! How can we ask government to address the demise of primary care when we can't tackle the root of it ourselves?

Thanks to the leadership of ACP & AMA for "building that momentum" for primary care. Remember high school physics? If these reforms have no "mass", then momentum is zero.

When will folks like you, Bob, learn that crumbs thrown at docs at the whims of politicians are just that...crumbs. As long as we are beggars, it does not matter if someone threw us a nice hat. We are still walking with no shoes! And, please stop referring to ACA as "reform".

Some perspective, folks. Primary care doctors are getting double digit raises (Medicare and Medicsid plus meant private payers) at a time when millions of Americans have lost their jobs and aid programs to the poor, like Medicaid and food stamps, have been slashed. Hardly crumbs or insignificant in the context of what is going on

I have to push back on the comments that the primary care increases are unsubstantial or crumbs.

The 10% Medicare primary care bonus results in an average gain of $8000 per year, each year, for the typical internist--$40,000 over five years. And you don't have to incur any new overhead costs or reporting burdens to get the bonus.

The Comprehensive Primary Care Initiative will pay a qualified IM practice with 800 Medicare patients an average of $192,000 more in the first two years for their care coordination services ($20 per patient per month X 800 patients x 12 months=$192,000) and $144,000 ($15 PPPM) for the following two years, PLUS the potential of shared savings, or $672,000 in total increase Medicare revenue over four years, not counting shared savings. CMS also is requiring payers in the selected sites to sign agreements to also support the qualified practices with higher payments or other practice support services.

Yes, there are costs to being a qualified practice and accountability for performance on five quality domains. But thousands of primary care practices nationwide are already certified as Patient Centered Medical Homes, so they stand to be in a very good position to qualify under this initiative and have already invested resources to have the necessary capacities to qualify. If successful in improving outcomes and lowering costs, CMS has the authority to expand the program nationwide after four years.

The impact of the Medicaid pay parity rule will depend on the state in which you practice and how your Medicaid payments compare to current Medicare rates, but the gain will be very substantial--40% in some states for all of your Medicaid visits and vaccinations for the next two years. And the states actually saving money from the proposal, so there will be no offsetting eligibility or benefit cuts to pay for. According to CMS's required regulatory impact analysis. "The aggregate economic impact of this proposed rule is an estimated $5.52 billion in CY 2013 and $5.66 billion in CY 2014. In CY 2013, the Federal cost is approximately $5.74 billion with $225 million in State savings. In CY 2014, the Federal cost is approximately $5.96 billion with $300 million in State savings. The State savings are derived from the projected increases in reimbursement rates expected to occur prior to passage of this legislation between years 2009 and 2013 through 2014, which will now be paid for by the Federal government." All $11 billion will go to general internists, IM subspecialists, and pediatricians over the next two years. The more Medicaid patients you see, and the lower your state's current Medicaid rates compare to Medicare, the bigger your increase will be.

These changes do not solve the primary care crisis, but primary care internal medicine is surely better off because of them. And they are all the result of the ACA, and at risk of being terminated if the Supreme Court rules against it or the election results in a mandate to repeal it.

I understand that primary care physicians have been dealt a bad hand in the past, but in what alternative universe is it crumbs or insignificant to get $40,000 in increased Medicare revenue from the primary care 10 percent bonus, Medicaid increases for visits and vaccinations that will exceed 40% in some states ($11 billion more in total payments to primary care physicians who see Medicaid patients), and more than a half a million dollars in total Medicare revenue increases (plus shared savings) over four years for qualified Comprehensive Primary Care Initiative Practices? Especially when wages for most Americans are at best flat, millions are unemployed or underemployed, and poverty programs are being slashed to achieve budget savings?

ACP--and I--am very proud of the work we did to get these programs authorized by the ACA and our ongoing work with CMS to implement them effectively.

What context are you talking about? "The average physician’s net income declined 7 percent from 1995 to 2003, after adjusting for inflation, while incomes of lawyers and other professionals rose by 7 percent during the period."(NY Times, 2006). In my personal experience, the decline continued up to the present, aided by government action and insurer abuses. The 10% increase is a positive correction, as I stated, but there is always that SGR situation, isn't there?

I dispute that "you don't have to incur any new overhead costs or reporting burdens to get the bonus." Just participating in the Medicare program does! CMS requires electronic prescribing to avoid economic sanctions. Medicare D means a flurry of drug pre-auths and denials -- our office is fielding up to 10 a day.

As far as the Medicare management fee, the numbers look big, but are meaningless for the small practice internist who lacks the resources for a PCMH. A PCMH has start-up costs, and there is a necessary delay between when payment incentives begin. A 2010 report by the Deloitte Center for Health Solutions on the patient-centered medical home (PCMH) finds that "start-up and maintenance costs are high. In particular, fixed costs for information technologies and a multi-disciplinary care team are substantial." Sorry, but I am not going to take a second home mortgage to bet on the PCMH.

There are now 27 US States suing the federal government over the various expansions in the Medicaid program dictated to them by the ACA. They don't believe the figures on cost savings and benefits put forward by the Obama administration either.

So excuse some of us for reserving judgement on the benefits for primary care. I see all frosting, no cake.

According to the Bureau of Labor Statistics, the mean income for general internists in 2011 is $189,210,1.6% higher than the prior year. Not great, in terms of percentage increase, but still one of the higher paid professions. Other surveys show a more positive trend. MGMA's 2011 salary survey showed the internal medicine (general) was one of three specialties that gained, while all others lost ground:

Bob,I don't know about the averages or the medians.Things change.Primary care doctors increasingly are choosing to be employed. The organizations that have the resources to pay a salary do not necessarily link the production value of primary care with the salary. There is institutional value to the products offered by the employing company -- cost savings by way of fewer referrals or fewer ER visits and perhaps better looking statistics as selling points for contracts in terms of chronic disease management and patient satisfaction scores.

There are other ways to accomplish these things, and so the position of primary care is perhaps a bit precarious.

We have tolerated an erosion of our support staff.We now have MA's where we used to have RN's working with us.We used to more easily share primary care responsibilities for some problems with specialists - where now we take the brunt of patient questions and concerns about everything and we are frequently placed between the insurance company and the patient and find ourselves asking why a patient needs to see a colleague and what specifically is going to come from the visit.

Yes.Maybe those are things that should have been happening all along, but the changes have become somewhat antagonistic because of the expectations patients and families now have.

And back to the point of work culture -- I wonder if primary care physicians in independent practices are doing as well as those in the larger organizations who are employed.

I think the cost of that may be our identity. When a physician starts their own practice they have to build it. They build it by assembling a staff and a product that attracts patients, and the patients become part of the practice.In models where physicians are employed a physician walks into a clinic with a 'panel' of patients. And they may be just as busy on day 1 as they are a year later or 2 years later.There isn't much building.The primary care role becomes more of an urgent care role.A patient identifies with a primary care physician but during a year is more likely to see someone else because their own doctor has a full schedule or is working a different shift or something else...

Okay.I very much appreciate what ACP does and the accomplishments are great.But I work in a small group and we make decisions about staff costs and about contracts and so when primary care gets an increase we of course have that diluted greatly by overhead. And the increases may not effect the contracts at all.

As Leadership Day approaches I again hope that our lobbying efforts focus on improving care for our patients.We will not convince any legislators to support us if we argue that we are somehow not keeping up. We are a well paid profession and we have to argue that changes that we advocate will help patients and improve access and lower costs.We also need to make our cases as small business owners, and the predictability issue is important. The SGR makes income to a small practice hard to plan for and on that basis it is really harmful to not replace the system.

Bob look at it from a general internist’s perspective. Over the past 15 years, the Medicare reimbursement for typical office visits 99213, 99214, and 99215 (a general internist’s bread and butter) have not kept up with inflation nor practice expense. On CMS’s website it estimates that a general internist’s practice expense is $110.62 per hour, which is a very low estimate to about $210-$250/patient contact hour real life. CMS’s website also has the time it takes to do these visits (23 minutes for 99213, 40 minutes for 99214, and 55 minutes for 99215). If an internist is building their schedule based on these times and does not want to keep patients waiting in the waiting room, they can not generate enough income with Medicare patients to even cover overhead.

The Median compensations you quoted are probably from MGMA data, which focuses on large group practices with ancillary services to boost revenue or are hospital owned practices (again with ancillary revenues to boost income). When I got the latest MGMA Book for the cost of primary care practices there wasn’t even a non hospital owned internal medicine practice group because there were less than 10 surveys completed.

The other “general internists” that are included in the incomes you referred to are hospitalists who do no outpatient medicine and are typically much higher than outpatient general internists. The real income for small group general internists are much lower.

So long at the system is designed to reward procedures so grandly, primary care will continue to dwindle even with some “focus” on primary care. Did you know that a cataract surgery has an RVU of 22 and a comprehensive evaluation on a complicated patient (99215) has an RVU of 4. So an ophthalmologist can general more revenue in less than 30 minutes than an internist can by spending 5 hours improving the quantity and quality of patients with multiple medical problems.

The non RUC controlled, non RBRVU dictated marketplace of hospital employers have determined (by way of subsidies in 2010/2011) that hospitalists(the vast majority of whom are young general internists) are a value at an annual subsidy of $136200 a year. This is not out of pity, or out of us lobbying for anything, or any such beggarly activities. The value we provide is worth atleast that. Considering the central role we have historically had in our patients decision making process on major health care issues, which has been tremendously devalued in recent years (i believe intentionally) i have no problem in saying most young generation internists do not trust the system to be fair to them(we see the trends and they are only one way). I guarantee that deep pocketed employers will not do this for a loss, they inflate costs, influence decision making, or make up for the loss of bargaining power for us as a profession, they use brass knuckle negotiating or political lobbying or whatever methods needed to negotiate what is fair and then some for an indespensable service, all of which does nothing to ease the cost escalation issue. Efficiency plays no role in any of this, it is just the buzz word. Bottom line is new internists are becoming hospitalists/hospital employed mainly due to the hefty subsidies offered, not because of any other reason. The best way to ensure General internists do what they are best trained to do is to pay them fairly and treat them fairly and reduce the red tape. None of this has been true in the past 2 decades. Anyone who says otherwise is simply lying. We are seeing the results now. As to your comparisons with other professions, i do not think that is reasonable, most general internists are not leaving to become CPAs or lawyers, they are choosing procedural specialties, and hospitalist jobs, and other such areas of work because the risk reward of a small business practice has become warped, by the powerful force of those in control of health care dollars. When i see the situation reverse and general inernists leave hospitalist medicine/hospital employment and start setting up private practices, i will believe there is hope. The forces right now on the other hand are pushing doctors the other way and into emoloyment, not out of choice, but out of necessity. Eventually this will reach critical mass and once corporate cheiftains gain total control over the profession, they will dictate terms tous. Then what, do we unionise? The ACA worsens these trends. These are not hypotheticals, they will sadly play out over my career span. It is not that I do not see the small incremental changes, it is that it feels like too little too late, it too like other initiatives in the past allegedly meant to help will fizzle, why for instance the 2yr cap on medicaid parity, or the 3yr cap on the pilot of the care coordination fee. Ironically i am told that the rbrvu system was set up to make the playing field level for primary care.........really by stacking the RUC with specialists?Propoganda is just that, I drank that koolaid for yrs 2000-2009, lets see the trends.

As I have followed this line of comments I have to believe the core issue is the broken contract between medical doctors and society. Many years ago a doctor worked hard, did well, and garnered the respect of the community.

We can see from this link a call for management skills as part of the pre-med curriculum. Something I feel is sorely needed.

At this link we can see a former hospital CEO finally coming to the realization that hospitals are being run as financial institutions and the health and welfare of patients falls aside to accomplish these goals.

A recent piece I read highlighted how a surgeon felt left behind as his medical career had begun in the seventh grade. Good at math and science and very competitive he excelled in school becoming a respected doctor only to find he is an outside due to his lack of social skills. He would have been accepted in years gone by, but today finds it difficult to navigate a changing world.

I found Jay’s numbers on doctors in private practice shocking. I recently had a piece published on another blog, shameless self promotion, highlighting the changes I see in a friends daughter’s upcoming experience in medical school, and hoping she will still be able to ask a patient: How can I help you today?

The comments were interesting as they focused on the cost of her education. Carrying some undergraduate debt she will end up owing about $250,000. A couple of doctors were dismissive of the debt amount and how business interest will control her ability to become a pediatrician. Coming to my rescue were some current medical students and a recent medical school graduate.

We really have put doctors in a no win situation, but still demand continued service.

Bob, I find your thinking very distorted, although I am not surprised. For once I agree with most of what Harrison says, except for the last line.

The fundamental problem for all cognitive specialties is that we simply don't 9or can't) get the $ value our work deserves. The main reason for this is the CPT system with its RVU's etc. This only encourages volume-based practice and devalues patient care. Instead of all the complicated programs, it would be best if we were allowed to balance-bill medicare patients - they can then decide if they value their doctors' service enough to pay the difference. Or they could look for someone who does not balance-bill. A free market approach would yield best results...instead of jumping through hoops hoping for some crumbs.

Steve,The cost per patient contact hour for overhead came from MGMA data for family practice not associated with a hospital. As I mentioned, MGMA data typically comes from bigger groups who have ancillary services (which also raises overhead). I can not find any data about how much it costs to run a small group practice. Fortunately our office is very efficient and comes in below the CMS average.